Final answer:
The marginal tax rate is the tax rate applied to the last dollar of income, which in the case of someone earning $35,000 a year would be 15%. This rate only applies to income within the specific bracket, not to the total income.
Step-by-step explanation:
The marginal tax rate is not a person's income divided by the amount he pays in taxes, nor is it the total amount of money that the government will collect from the tax on a good. Instead, the marginal tax rate is the rate paid on an additional dollar of income. To better understand, consider this example:
For a single taxpayer with an annual income of $35,000, the first $9,075 is taxed at 10%, the income from $9,075 to $36,900 is taxed at 15%, and income beyond $36,900 would be taxed at 25%. Given this taxpayer's $35,000 income, their marginal tax rate would be 15% because that is the rate that applies to the last dollar earned. It is important to remember that the marginal tax rate applies only to the income in that specific bracket and not to the entire income